Sanctioned Rosneft pays off $7.1bn loan a day early

Rosneft says it has paid $7.154 billion to creditors on loans it used to buy TNK-BP for $55 billion in 2013. Russia’s biggest oil company paid off the debt a day ahead of schedule.

"On Feb. 11 the company paid lenders $7.1 billion," the
company said in a press release on its website Thursday.

The company has now paid off more than half the debt coming due
this calendar year.

"The overall amount paid since December 2013 totaled $33
billion, in full accordance with credit agreements,” the
statement said.

In the statement, Rosneft stressed that it wouldn’t be converting
rubles into dollars in order to pay its debt obligations.

Investors, and even the Central Bank, speculated Rosneft bought
up $10.9 billion in foreign currency in December to pay off a separate $7 billion loan, which coincided
with the 20 percent crash in the ruble against the US dollar. The
CEO of the company, Igor Sechin, denies the claim.

The company lost more than 40 percent of its net worth in dollar
terms during the ruble’s more than 50 percent decline against the
dollar last year.

Low oil prices both hurt and help Rosneft. Weak prices means less
revenue, but low prices have driven down the value of the ruble,
which cheapens operation costs for the company, which collects a
majority of its revenue in dollars.

The company was targeted by both US and EU sanctions, and can no
longer borrow capital from Western markets.